IB skill practice

Analyse market power and monopoly basics

Economics SL skill with original exam-style diagram, data-response, and evaluation seeds.

Paper 1, Paper 2 5 marks Difficulty 4

Analyse monopoly inefficiency

A monopoly diagram in a local Auckland policy case study shows price above marginal cost at the profit-maximising quantity. Explain why this can be allocatively inefficient. Use the labelled diagram, data, or extract evidence before writing the answer. Enter the answer and choose the interpretation that best matches the economic evidence.

Worked practice: economic evidence and answer

Identify the economic evidence first, then state the result and interpretation.